Silver has once again found itself falling out of favour with investors in the short-term with the place sliding below $24 an ounce to its lowest level since the end of March.
Given its smaller market size than its precious metal peer, gold, silver is often exposed to sharper price movements when sentiment switches. Right now, the fundamental case remains strong for silver, with the supply/demand balance forecasting another deficit this year based on healthy demand from the solar and electric vehicle industries in particular.
However, silver doesn’t solely trade on its fundamentals and instead is often knocked by economic sentiment and the words and actions of the Federal Reserve. While silver was already on a downward trend, the recent comments from Fed officials will have added to the negative drivers for the metal with the likelihood of a pause on further interest hikes by the US central bank looking a little less likely.
Right now, silver is enduring the phase where it is overly punished for any perceived negative outlook to its case so it could well slip further in the short-term. However, the longer-term outlook remains healthy for silver so this is likely to be a temporary blip on an otherwise upward trajectory to its price.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice.
